Healthcare M&A Report: Fewer Transactions Yet Total Transaction Revenue Reaches All-Time High

Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

For the past three quarters, healthcare mergers and acquisitions activity has followed a similar theme: fewer transactions while the total transaction revenue and average size of seller by revenue remain at an all-time high level. Kaufman Hall reported in its Q3 2021 Healthcare Merger & Acquisition Activity Report that the average seller size for the first three quarters of 2021 was $659 million, which is nearly double 2020’s average of $393 million. The number of transactions through third-quarter 2021 (34) are almost half of what was announced through the first three quarters of 2020 (62).

The three major transactions announced for the third quarter include:

  • Intermountain Healthcare and SCL Health, both based in the Mountain West, will combine to operate 33 hospitals, making it an $11 billion system

  • HCA announced plans to acquire five hospitals from Steward Healthcare in Utah

  • In the Chicago metropolitan area, NorthShore University HealthSystem and Wedward-Elmhurst Heath announced plans to merge. With combined geographic coverage throughout Chicago and its north and west suburbs, this will create the second-largest physician network in Illinois.

The trend of fewer, more strategic transactions within healthcare M&A activity is likely to continue. We expect providers to look to acquire or merge where they can increase market share in new geographies and expand their core service offerings.

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient's choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of Newmark, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains. This document is intended for informational purposes only and none of the content is intended to advise or otherwise recommend a specific strategy. It is not to be relied upon in any way to predict market movement, investment in securities, transactions, investment strategies or any other matter.

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